SWEDEN: VIEW: JP Morgan No Longer Expect March Riksbank Cut
Feb-06 08:38
JP Morgan have removed a March Riksbank cut from their forecast, now expecting the next 25bp cut in May (previously saw 25bp cuts at both meetings).
- Although JPM “strongly doubt that the underlying inflation trend has suddenly changed dramatically” following today’s flash CPI data, they admit “the optics look bad”.
- “Despite various growth indicators recently moving in favor of our call of two more cuts, we remove the March cut from our forecast”.
- They suspect rents were one culprit behind the stronger-than-expected CPI print, alongside potential basket effects from the annual reweighting process.
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MNI: EUROZONE DECEMBER CONSTRUCTION PMI 42.9 (NOV 42.7)
Jan-07 08:30
- MNI: EUROZONE DECEMBER CONSTRUCTION PMI 42.9 (NOV 42.7)
GILTS: Flat Start, Long End Supply Due
Jan-07 08:20
Little net movement in gilts as softer-than-expected French CPI counters earlier selling in Bunds.
- Futures +10 at 92.05,
- Bearish technicals intact in the contract.
- Initial support at the Dec 19 low/bear trigger (91.64), while initial resistance is located at the Jan 2 high (92.88).
- Yields little changed across the curve to start.
- Gilt/Bund 10-Year yield spread flat at 216bp.
- SONIA futures 0.5-1.5bp higher on the day with wider bonds off lows and BoE-dated OIS showing 57bp of cuts through ’25 vs. 56bp early today.
- DMO issuance for calendar ’25 gets underway this morning, via GBP2.25bln of the 4.375% Jul-54 gilt.
BONDS: Bobl/Bund Block trade
Jan-07 08:13
Bobl/Bund block trade suggest a steepener, perfectly weighted.
- RXH5 ~2.35k sold at 132.40.
- OEH5 ~4.95k bought for 117.25.
